Economics · Oct / Nov 2016 · Paper 13 · Question 18

A government taxes farmers $12 per kilo when they supply food on the open market where X is the original equilibrium position. The effect is illustrated in the diagram below. What will be the new equilibrium price and quantity supplied as a result of the tax?

1. Aequilibrium price 20, quantity supplied 40
2. Bequilibrium price 25, quantity supplied 50
3. Cequilibrium price 35, quantity supplied 30
4. Dequilibrium price 40, quantity supplied 20

As printed in the paper